Mascia requests a Senate Judiciary Committee hearing on BMHA spending

In a letter this week, former elected housing commissioner Joe Mascia asked United States Senate Judiciary Committee Chairman Charles Grassley (R-Iowa) to conduct an investigation into “pervasive corruption and mismanagement” at the Buffalo Municipal Housing Authority (BMHA), which enjoys a $43 million operating budget comprised almost entirely of federal funds.

Mascia has offered written testimony to the Committee and has made himself available for any hearing that Grassley may conduct. Grassley wrote a letter to the BMHA earlier this month asking the Authority to provide additional information to the Committee regarding the travel expenses of senior administrators.

Mascia is also providing the Committee evidence of millions in missing money.

In March of 2016 a special meeting of the Common Council’s Finance Committee was held to investigate a $3.4 million BMHA owed to the City of Buffalo that had been accumulated from unpaid utilities from 2005-2009. Councilman Richard Fontana (who chairs the Finance Committee) called the meeting following a request by BMHA Executive Director Dawn Sanders-Garrett for an additional $250,000 grant due to fiscal mismanagement. Before approving the $250,000 grant request, Comptroller Mark Schroeder alerted the Council of the longstanding $3.4 debt owed to the city. However the authority’s annual Independent Auditor’s Report (performed by Clifton Larson Allen LLP of Baltimore, MD) claimed that the $3.4 million is not due to the city. The audit wrote off the entire $3.4 million BMHA debt by declaring that its management unilaterally claimed that an exactly similar amount ($3.4 million) is due from the city to the BMHA, but without showing any supporting documentation.

The BMHA audit states: “The Authority recognized $3,467,714 as income during the current fiscal year as a result of writing off old outstanding payables to the City of Buffalo for water, sewer, and other services. Management has determined that the Authority has offsetting amounts due from the City to reimburse operating deficits incurred during the fiscal years 2004 through 2010.”

The BMHA owes city taxpayers years’ worth of debt and – with the stroke of a pen on an audit paid for by the Authority – under Mike Seaman, Chairman of the Board of Commissioners – they make $3.4 million disappear. How could such a large amount of debt gone uncollected for so long, you might ask. Seaman simultaneously serves as the Authority’s Chairman and as the City of Buffalo’s Finance Director, the administration official responsible for collecting debts owed to the city.

Mascia is also concerned about suspect procurement practices for professional services.

The New York State Inspector General’s Office released an Audit Report (Audit Report No. 2015-NY-1003) finding that Authority officials made payments for outside legal services without documenting that these services could not be performed by the Authority’s internal general counsel and without ensuring full and open competition for the work. The report recommends that the Director of the Department of Housing and Urban Development’s Buffalo Office of Public Housing “instruct Authority officials” to “strengthen procedures to ensure that legal services provided by outside firms are obtained in accordance with Federal procurement requirements.” The report also recommended that Authority officials “establish procedures to ensure that they not procure outside legal services that should be provided by Authority officials.”

The Authority has suffered from decades of substandard management.

In a letter dated March 31, 2015, Lisa M. Pugliese, the director of the Buffalo field office of the United States Department of Housing and Urban Development, threatened federal receivership of the Buffalo Municipal Housing Authority if sweeping turnaround plans are not produced and adopted within 30 days. The agency has chronically received “substandard management” designations from the federal agency.

“[BMHA] has failed to maintain an acceptable occupancy level in its developments. This is the main cause for the substandard score,” Pugliese wrote. “The BMHA currently has 598 vacant units, and an overall occupancy rate of 84%.” At the same time that nearly 600 units sit vacant or deteriorating in BMHA’s developments, the waiting lists for BMHA’s Section 8 voucher assistance program, as well as those for the Rental Assistance Corporation and the Belmont Shelter Corporation, are closed because they are too long. People are waiting beyond two years to access a voucher that would allow them to obtain assisted housing.

The AD Price Courts complex is entirely vacant, comprising 170 units. The Commodore Perry complex has 279 vacant units of 414 total. Those two problem properties, which have fallen into a state of disrepair, comprise the majority of the 598 vacant units. For calendar year 2015, the BMHA lost $1.5 million in subsidy eligibility as well as the potential tenant generated rental income, due to vacant units.

Mascia thinks that political patronage is at the root of the Authority’s disfunction.

As an example, he points to BMHA Assistant Executive Director Modesto Candelario, who manages the Authority’s day to day operations despite lacking a requisite degree. Candelario’s wife, Lucy, is the director of the Belle Center, a community center that is run by an entity called Erie Regional. The Center’s board of directors includes many of the same Mayoral appointees to BMHA’s board of commissioners and executives, including Dawn Sanders-Garrett, Michael Seaman, and Candelario himself. Mascia alleges that Candelario did not properly disclose his conflict of interest during the selection process that hired his wife as the Executive Director that center. He says that position was never posted publicly, as is required of federally funded programs and the hiring process was not compliant with applicable preference policies.

Mascia has concerns about ‘innovative’ governance structures.

The Authority has been transferring ownership of several properties to non-profit entities, whose board members are familiar BMHA commissioners and senior staff. These non-profits are then expected to operate the housing complexes quasi-independently of the BMHA without the disclosure and compliance requirements expected of a public authority. The governance model lacks transparency, oversight, and accountability. Residents worry that the strategy will lead to unregulated rent increases, neighborhood gentrification, and residential displacement.

The mismanagement of the Buffalo Municipal Housing Authority is staggering, but it comes as no surprise to tenants and neighbors — who have had to live with the horrid quality of life impacts that the authority’s dysfunction creates.

The Authority employs one plumber to service nearly 4,000 units. There is only electrician, one painter, and there are no security guards.

An administration official who asked not to be named said that the Authority understands that “most” of the agency’s housing units have lead paint — with no plan to remediate the health threat.

Fixing the problems shouldn’t be difficult from a governance perspective. Five of seven board seats are appointed by the Mayor. Residents only elect two commissioners to the board. That governance model intended to give the Mayor firm control over the entity so that it would be easier to manage. Critics allege that it has been abused with unabashed patronage and graft.

As an elected Housing Commissioner for five terms, Mascia sought to publicly expose the pervasive corruption at the Authority. As a result, he has been a target of political retribution. The governing board and key senior staffers – including General Counsel David Rodriguez — have engaged in a deliberately orchestrated campaign to destroy him.

In February of 2014 Mascia began asking questions about an out-of-control demolition contract at the former Kensington Heights housing complex. That contract had ballooned wildly and inexplicably, and the Board refused to explain why. The contract had been initially awarded at $5 million. Under suspect circumstances, the contract was then terminated and awarded to another firm. The value of the contract ballooned to $13 million. The demolition still has not been completed, with one tower still left standing.

Adam Perry, a prominent local attorney and prolific campaign contributor who enjoys lucrative legal work with BMHA and the City, began to target Mascia after he began demanding a proper accounting of the Authority’s spending and contracting process. Perry drafted a complaint against him for failing to file a campaign finance disclosure, which he filed late. Never before (to the best of local memory) had this offense ever been prosecuted by the Erie County District Attorney. But Perry pushed hard and lobbied his close friend, District Attorney Frank Sedita.

The District Attorney then sent law enforcement officials to the Erie County Clerk’s Office, where Mascia worked part time, in order to make a scene. The effort intimidated County Clerk Chris Jacobs into terminating Mascia over a politically motivated and largely contrived charge. Within days, Jacobs fired him. At the time when Perry was drafting a complaint against him for failing to file a campaign disclosure, Perry was doing legal work for BMHA.

A March 4, 2015 article in The Buffalo Chronicle opened with the line: “Housing Commissioner Joe Mascia has been targeted for political retribution by the Board members of the Buffalo Municipal Housing Authority ever since he began asking questions about a suspect asbestos removal contract last February”.

Only five days later, Mascia’s longtime friend Paul Christopher was being paid to secretly record him while prodding him to disparage a list of African American politicians aligned with Grassroots, a political club close to Mayor Brown, in a 15 second staccato performance. That recording turned up at The Buffalo News four months later – in the middle of Mascia’s campaign for Common Council – and was quickly made famous in the local media. His political opponents demanded he end his campaign and resign his office. His refusal to do so stunned the city’s political world. Instead, he asked, who paid Christopher to produce the tape and why?